Arabic original title: البعد الاقتصاديّ لموظفي القطاع العام والمؤسسات الرسمية
Original publication: Al Joumhouria Newspaper
Publication date: August 24, 2024
Original Arabic article: https://www.aljoumhouria.com/ar/news/730604/
This article examines the economic role of Lebanon’s public-sector and official-institution employees after the collapse that followed October 17, 2019. It argues that, despite the erosion of wages, inflation, fuel costs, reduced working days, and deteriorating living conditions, these employees continued to sustain basic state functions, preserve public services, support local demand, and prevent a complete administrative and socio-economic breakdown.
English translation / adapted English version:
The Economic Dimension of Employees in the Public Sector and Official Institutions
In the aftermath of the profound economic crisis that has engulfed Lebanon since October 17, 2019, employees of the public sector and official institutions emerged as a vital and decisive force in preserving the stability of the state. These employees, whose role is often overlooked when analysing economic performance, served as the backbone of the national economy at a time when the country was suffering from hyperinflation, currency collapse, and severe shortages of essential goods and services. Their economic impact was not limited to the provision of public services; it extended to maintaining an indispensable degree of social and economic stability.
From an economic perspective, public-sector employees play a pivotal role in supporting domestic demand. Despite the substantial decline in the value of their salaries as a result of inflation and the collapse of the exchange rate, they have remained an essential component of consumption within the economy. Even though the purchasing power of their salaries has been severely eroded, those salaries continue to inject money into the market through daily expenditure on essential goods and services. This flow of money helps preserve a degree of economic balance by sustaining domestic demand, which is a fundamental factor in preventing further economic deterioration.
Alongside their role in supporting domestic demand, public-sector employees contribute to maintaining the infrastructure of government services. At a time when the private sector has undergone a significant contraction, the continued provision of public services has constituted an indirect form of support for economic activity. For example, the continued operation of institutions responsible for issuing licences and official documents facilitates commercial transactions, while the supervision of the education and healthcare systems ensures a degree of social stability.
This form of economic infrastructure is invaluable, as it represents the fundamental framework through which the economy can eventually be rebuilt on sound foundations.
Although the public sector is not currently witnessing new recruitment because of budgetary constraints and financial pressures, its economic impact remains substantial. While new public-sector hiring has been severely restricted by the financial crisis, retaining existing employees carries considerable economic value. Their role is not confined to performing their professional duties; they also contribute to market stability through their continued consumption and expenditure. The absence of new recruitment does not mean that the public sector has lost its economic impact. Rather, it underscores the importance of retaining existing employees during periods of crisis.
As the fuel crisis intensified, the challenges confronting these employees multiplied. Rising transportation costs led to a reduction in working days, affecting public-sector productivity without bringing its vital role to an end. Despite reduced working hours, employees continued to ensure the delivery of essential services, thereby preventing the complete collapse of government performance. These sacrifices demonstrate the importance of the role played by public-sector employees in sustaining the country’s economic and social cycle.
The psychological and social pressures endured by public-sector employees, amid declining wages and rising living costs, did not diminish their national commitment. Their resilience reflects their vital economic role in supporting social stability. The continued provision of essential services under such difficult circumstances stands as testimony to the strength of this sector and the significance of its economic contribution.
Lebanon owes these employees a great deal. Thanks to their Herculean efforts, the state remained on its feet despite successive crises. Their economic impact extends far beyond the provision of government services, for they constitute the pillar upon which the national economy relies during its most critical moments. Every one of them deserves a medal pinned to their chest, because their contributions not only kept Lebanon standing but will also provide the foundation upon which its future economic recovery will depend.
Publication reference:
This article appears within the wider Publications section, under Lebanon, Economy & Public Sector Reform, where public-sector resilience, administrative continuity, wage collapse, local demand, public services, and institutional recovery are examined through economic and governance analysis.
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